I read a study recently that reported 27% of U.S. adults use a financial advisor. If even half of the people in this country are adults, that’s about 45 million people in this country who have a financial advisor. Today’s topic is who is getting more value, overall, from these 45 million relationships; the clients or the advisors? I think too many of these relationships benefit the advisor more than the client, so here are 3 ideas for how to level the playing field and get more value from the relationship with your financial advisor.
- Tell us what you expect. There’s a wide range when it comes to what clients expect from their financial advisors. Some clients expect us to know what stocks are going to go up and when. Some people want to get more organized, some want a plan for retirement, some just want a sounding board, and some want all of the above. Here’s the thing: when a financial advisor first meets you, they’re going to be so eager to sell you on themselves that a question like “What are you expecting from this?” is very unlikely to be asked. In a perfect world you wouldn’t have to explain your expectations, and the advisor would just “get it”. But if this question isn’t asked or addressed, I think disappointment is inevitable. Simply making your expectations known will greatly increase the odds that you’ll get the kind of guidance you’re looking for.
- Don’t be shy. Clients often say and ask what they think they’re supposed to in order to not sound dumb. It is the advisor’s responsibility to learn how you behave with and think about your money. But if you give a less-dumb-sounding version of your real answer, then you’re selling the relationship short. There are plenty of advisors who are actually interested learning about your relationship with money, no matter how silly it may seem to you.
- Don’t assume “You must have clients with much more money than me”. “Your other clients are probably much more sophisticated than I am”. I hear things like this all the time. Don’t make these assumptions. Here’s a secret: Getting clients in this business is hard. Keeping them is even harder. Good relationships with good people are what keep the lights on for us and motivate us to work hard. If you are a reasonable person with fair expectations, you are way more important to your advisor than you’re probably giving yourself credit for.
To get more out of your relationship with your new advisor, tell us what you expect, don’t be shy, and don’t assume. If you already have an advisor, adopt a mindset that contains these three things. It will change the dynamic, you’ll likely get better advice, and end up with a better relationship with your advisor.